The market is selling off ! Why ?
The market is selling off.
All major indexes are down 1 or 1.5 percent and VIX has jumped up 1.5 points. Most of the leaders are under pressure and they are down from $5 to $15 at the moment. The sell off may continue here, unless we pull up over 1400 on SPX and close higher. Here is a intraday chart on SPX. Please click to enlarge.
Feds dependency may have come to a halt for this stock market in 2012. Amid growing and improving economy Feds are reluctant to provide liquidity as per the Fed meeting minutes issued yesterday, which started this wave of selling and angst.
Fed’s dependency is what this market has got used to since 2008 and every time there is a hiccup the market looks up and towards the Fed to do something. It’s this withdrawal from the symbiotic relationship that is hard for the market to accept. In a few days they will get adjusted to it, more or less.
Looks like a kid has lost a generous Uncle.
Meanwhile it is a good idea to stay on the sidelines and let this pass. The fundamentals are improving and private job numbers provided by ADP came to about 200,000 jobs added. We have to see how the numbers come on Friday when non farm payrolls are added, till than the market will be a waiting game. Given the absence of a non- horrible number market should rally.
Among market leaders AAPL, PCLN, CMG, ALXN, GOOG etc and all others are getting bashed and sold off. We are keeping an eye on our positions and any further sell off should trigger defensive actions.
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